The Economy

[can't sit still]

For millions, the disintigrating economy is going to be a central part of their lives. I found some good papers to explain various facets. Feel free to expand, question or comment on any espects.

Those of you who are in Britain or America will need to pay a lot of attention to the financial state of your country. This is a very good article about what to expect during the next 2 quarters. http://www.safehaven.com/article-8996.htm

This is a very good article about chaos theory and uncertainity as it relates to the economy http://www.safehaven.com/article-8984.htm Some of these ideas were covered years ago in a book by Roberto Vaca,,, "The Coming Dark Ages" It discusses the breakdown of supersystems. It impressed Asimov. http://www.printandread.com/download/comingdarkagefree.pdf

This paper has much information on future energy expectations http://www.paulchefurka.ca/WEAP/WEAP.html
This 5 part vid is extremely informative on exactly what money actually is.

http://www.silverbearcafe.com/private/kondratieff.html
This page has excellent charts on the relative value of the dollar and the amount of gold backing that the dollar has http://www.howestreet.com/articles/index.php?article_id=2463

David Walker, the Comptroller-General of the U.S. has been trying to tell Americans that they're broke. No one wants to hear it http://www.washingtonpost.com/wp-dyn/content/article/2006/12/23/AR2006122300653.html

The banks are required to carry a certain amount of reserves. By doing investments in mutated securities, they avoid that requirement. Now, they have billions in bad investments and no way to absorb the losses. http://onlinejournal.com/artman/publish/article_2396.shtml

It does appear that many banks are going to go under. They deserve it. After the great depression, congress enacted many laws to control the excesses of greed from the banks. They recently spent 20 years lobbying congress to repeal those laws. And what did we get,,, A savings and loan meltdown.
They weren't happy with that so they got the president to void other banking laws. Now we have a banking meltdown.
There are many interesting articles here. http://www.dollarcollapse.com/
The main crash isn't expected to come until about the second quarter of next year. Dan

[Justin]

With all due respect, stuff like this can be found all over the internet. I would consider it garbage to tell you the truth and please don't take this personally because it's not. Let me explain...

What goes in is what comes out. The above is something I personally would have no interest in reading. Why would anyone for that matter?.. Of course this is my own distorted view. Actually, I watch very little news because I've been too busy working on other things. Funny thing is, it simply doesn't effect me like it used to.

During Y2K I was one of those who watched the news and prepared with extra food and all that crap. Watching every day then the 911 thing and the shootings and the OJ Trial and the war and death of Saddam... I could go on and on. Needless to say, there were times at the end of the day I could have sat in the corner of my room with a gun to my head... Not literally, but it's depressing to say the least. Then, anytime my friends and I got together we talked about what?.. The News. They still do. Just not for me anymore.

My view is, there are plenty of good things in this world and on the Internet that it's a shame to load ones mind with such pollution. If a person spends all their time and energy focused on what is in the news, it instills fear and lots of extra thoughts are entering the mind which sends the signals that create toxins within the body and actually do damage and not good.

Referring back to perception... that's all any one of us can control. Most of what's happening on the news is completely out of our control. We cannot control anyones perception but our own. Once that's in balance across humanity, then the news will change. All that news is doing is feeding off the fears of it's viewers. Realizing that some people will read that stuff and it will literally change their future based on how it effects their perception... that's not good!

News media is primarily focused on the negatives of the world we live in because people soak it up. Misery loves company and our news creates a lot of that. The more negative and gruesome the story is, the more it's played and of course it is what makes headlines. Instead of sitting down to read a book or feed the mind with positive energy, people would rather go home everyday to watch the negative pollution our news media puts out. Just not for me anymore.

There I go again beginning to ramble... 'cant sit still', please understand that this is just my opinion. We all choose our paths through life and that kind of news just isn't one of mine and I refuse to be a doom-sayer, the world has too many already.

I'll leave this "crap" up here but I would encourage people to look at the positive side of things in the world rather than the negative.

What we put into our minds and freely accept through our conscious decisions, will also come out in an energy that will effect our world and people in it. Essentially, we are and will create, that which we most often think... individually effecting all of humanity.

[Didymos Thomas]

At worst, we will slip into a moderate recession over the next year. A banking meltdown? "The main crash"? People are quick to blow things out of proportion, and if your articles speak of such things, they are making such a mistake.
If you want to worry about economic meltdown, think 30-50 years in the future if the US does not adjust it's China policy, and the overbearing power of corporations in politics. The two issues are close, and not easily resolved. We have always lead the multinational economy, and no idea what will happen when a shift in power occurs at the top.

[can't sit still]

The articles that I chose were meant to be educational rather than speculative. Much of the info is historical rather than sensational. I have no interest in fear-mongering.

I am a student of history. I've travelled to hundreds of places that figured centrally in the development of mankind. From Machu Pichu to Karnak, from John'O'Groats to Siam to Byzantium to Persepolis, I've travelled there by road to see the places that shaped the men and women.

Today's travails are just another page in history. They will play out in their own good time.
I've also studied geology. In the geologic time-sense, this is all just a minor blip. We're in the late Holocene. The ice will return as it always has lately.
Homo-sapien's history is less than 1% of the history of the sauropods.
I try to be an objective spectator.

[Didymos Thomas]

Well, you were the one who used "banking meltdown".
The banks are not going to "go under". Citi, who is probably in the worst shape, will still scrape by, even after firing their CEO. As for the depression, that was caused by speculation in the stock market. Congress enacted many laws to control that speculation, and some banking reform to help it along. The current economic crisis is the result of our trade deficit. The banks knew that if rates went up, many people would not be able to afford their payments; costly for the people and the banks (on average, a forclosure costs the bank 50 grand). The banks did not want this, billions of dollars in losses, they did not want this.

[can't sit still]

Thomas;
While you are correct about the banks preferring to avoid losing money, they got careless. With the invention of credit-default-swaps, the banks believed that there was no possibility of being harmed by defaults. Therefore, they did not maintain reserves of adequate size. It's not that the losses are that high,,,, it's that the reserves are too low. The ratio of assets to derrivatives at Merril-Lynch was 1.86% assets. Citi was marginally better at <3.5%>

That's why Citi just borrowed 7.8 billion at 11%!!! from Abu Dabai.
The Chinese government requires Chinese banks to maintain 15% reserves. The norm in the US used to be about 10%. Then it gradually fell to about 4-5% as bankers believed that risk was banished.

This site lists the major regulatory actions initiated in the '30s http://www.fdic.gov/about/learn/learning/when/1930s.html

One of the most important banking laws was the Glass-Steagall act
http://www.investopedia.com/articles/03/071603.asp
After lobbying for 20 years, the banking industry got it repealed in 1999

Bush throws out banking laws; http://query.nytimes.com/gst/fullpage.html?res=9D0CE7D61E3BF93AA3575AC0A9679582 60&sec=&spon=&pagewanted=all

The worst banking crash in the US history was the S&L crash brought on by irresponsible actions of the Federal Reserve. 1,000 S&Ls failed
http://arapaho.nsuok.edu/~cundiff/SavLoan.doc

Once again the FED is causing problems. Greenspan lowered interest rates too far. He said "with new technologies we can offer more products to more people" What he did was to loan money to people who could not pay it back. Not directly, of course, but the FED created so much money that the banks were forced to compete,,, so they offered loans to people who couldn't possibly qualify.

They did the same with credit cards. GOV went on a spending binge also. The combined US debt is 37 trillion dollars. I believe that the Kondratieff cycle of 56 years is partially dependent on people's failing memories. They forget why they wrote banking regulations. One of the main causes of the '29 crash was the "pools" They were susequently outlawed. With deregulation, they made their rebirth as Hedge funds.

The average ratio of debt to GDP in the US has been 160%. In 1929, it was 260%. It now stands at 370% The worldwide valus of derrivatives is 640 trillion dollars. This is <12> times the GDP. All fiat currencies have eventually failed. At the low point of the Roman empire, the previously pure gold coins were gradually reduced to 2% gold.

I find this all very interesting. It got it's modern start in the 17 century with the British banking system
http://www.rbs.com/about03.asp?id=ABOUT_US/OUR_HERITAGE/OUR_HISTORY/STORY_BANKING/BRITISH_BANKING

It was later "codified" by John maynard Keynes. Keynesian economics is the bible of most modern bankers and economists. The underlying fatal flaw in the system is that it requires unending growth. Real wages in the US started dropping after <1970>. Americans responded by having fewer children,,, smaller families. This ran counter to the needs of Keynesian economics so immigration was kicked into high gear.

This still wasn't adequate to produce the wealth that banking and GOV needed, so massive money creation and deficit spending were "institutionalised". The bubbles got bigger but the US economy couldn't sustain them. We packaged up junk mortages as AAA and sold them to foreigners to get their money. The whole world got on the derrivatives merry-go-round.

Meanwhile, in Austria, Ludwig von Misses founded a different school of economics. It did not agree with Keynesian economics. He predicted the fall of USSR and Japan <30> years ahead. The Keynesians said that they were a special exception. It remains to be seen.
http://www.mises.org/

It's one more page in the march of mankind. The only philisophical value that it has is that it shows that banks/people have to be protected from themselves.


"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
--- Ludwig von Mises, Human Action (1949)

[Didymos Thomas]

Thanks for the economic history; however, there is still no "banking meltdown", and the "crash" isn't going to happen sometime in the second quarter of '08.

You are right to bring up the national debt. China owns a great deal of that debt, and we also lose more in trade with China than with any other nation. Of course the Fed has only made the situation worse, and our representatives are responsible for the mess, but what else would we expect?

[can't sit still]

We're in agreement there. GOV wants more money than we send it,,,so it just makes up the difference. Of course state GOV doesn't have that option Schwarzenegger Will 'Declare Fiscal Emergency' In Weeks - News Story - KNTV | San Francisco

It looks like lending will be a bit tighter next year too; U.S. could face $2 trillion lending shock: Goldman - Yahoo! News

China, Japan and Saudi hold most of our paper. They definitely don't like to see the dollar drop. OPEC is meeting shortly to consider dropping the dollar peg.
This too, shall pass

[Didymos Thomas]

Jefferson argued that violent revolution was necessary every decade or so, that way the people will always maintain control over their government. He may have been right to a degree. The Washington administration was fantastic.

[can't sit still]

Didymos, If you take Jefferson's statement and couple it with the statement that "absolute power corrupts absolutely",,,, it doesn't leave a lot of doubt. Up to this point, "bread and circuses" have been available to "all" westerners. It's hard to say just how much erosion of liberty John Q public will tolerate as long as he can eat "cake".

I fear that the modern state has so many "force multipliers" that insurrection is fast disappearing as an option. North Korea is an example.
They're very quietly starving to death. Things will only get worse as the nascent industry of battle field robots improves it's products until they reach civilian and police deployment.

GOV is getting better and better at insulating and isolating itself from civilian oversight or correction. The electorate was/is very disappointed with the results of the last election.

Americans don't feel at all comfortable with the exigencies of maintaining an empire. Torture and genocide are SOP for a military empire. We're a bit too squeamish to continue with Pax Americana. Ike warned us about the military-industrial complex wanting to persue empire.

Britian killed 10 million Indians after the Sepoy rebellion. We just don't have what it takes to be great leaders/killers. The NEOCONS are souless but Americans in general don't want to sink that low.
I personally don't believe in murder to get what I want. I prefer to work for it. Call me old-fashioned.
Dan